Exponential Expansion Continues for Canada’s Licensed Producers

Last week, Aurora Cannabis left the marijuana industry stunned with a jaw-dropping $1.1 billion ($852 million USD) acquisition of CanniMed Therapeutics, making Aurora the world’s largest cannabis company based on market value.

Not to be outdone, Canadian licensed producer Aphria, Inc. announced a similar move on Monday, unveiling plans to purchase its rival Nuuvera Inc. for $826 million ($669 million USD). The deal is a strategic move for Aphria to expand globally, as Nuuvera already has operations in Germany, Italy, Spain, the United Kingdom, and Uruguay.

“It’s still early but [Nuuvera] has been laying the groundwork in a few different countries,” said Vahan Ajamian, Equity Research Analyst for Beacon Securities Limited in an interview with Marijuana.com. “Aphria is looking at these markets for growth and [with the acquisition]they acquire a management team that has a presence on the ground in these areas.”

Ajamian added that the international opportunities are not the only valued asset in this deal for Aphria. “It also gives them access to the New Brunswick market,” he said. “[New Brunswick’s] Crown Corporation has listed four companies that have gotten MOUs. Three of them are Atlantic Canada-based, Canopy, Organigram, and Zenabis. [Nuuvera] is the fourth one. By buying Nuuvera it gives them shelf space in New Brunswick.”

One of the welcome results from a deal of this nature comes by way of assisting international cannabis reform. As Aphria expands internationally, it is a further endorsement of the global industry and shows the marijuana sector is a safe and profitable bet.

“What we are seeing is a global phenomenon,” said Ajamian. “Canada is at the forefront. Countries are looking at Canada as the Gold Standard because of production, regulations and capital markets. The leading companies are looking to take a leading global position.”

When the sale is complete, Aphria will be paying $8.50 a share to Nuuvera shareholders, which equals a 21.4 percent premium.

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